Law Firm Trolls for Participant-Plaintiffs

While it’s hardly a unique occurrence these days, a law firm is reaching out to 401(k) participants in a potential “stock-drop” suit.

Stull, Stull & Brody, which says it has “substantial experience representing employees who suffered losses from purchases of their employer’s stock in their 401(k) plans,” noted that a “class action has been commenced in the United States District Court for the District of Connecticut on behalf of those who purchased the common stock of Terex Corporation between February 20, 2008 and September 4, 2008.”   

An announcement calls for potential participant-litigants, noting that “if you bought Terex stock through your Terex retirement account and have information or would like to learn more about these claims, please contact us.”

According to the firm, the complaint charges that Terex and some of its executives and officers “violated federal securities laws by failing to disclose material adverse facts about the Company’s true financial condition, business and prospects.” The complaint alleges that defendants “failed to disclose: (i) that the Company failed to properly and timely account for impaired assets in its ‘Construction’ and ‘Roadbuilding, Utility Products and Other’ segments; (ii) that Terex was experiencing declining demand for its products in its Construction, Materials Processing and Aerial Work Platforms segments; and (iii) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its prospects.” 

It goes on to note that on September 4, 2008, Terex announced that it was updating its “2008 full year guidance and providing quarterly guidance due to changing market conditions,” and that in response to these statements (which the law firm said “revealed various adverse factors negatively impacting Terex’s business”), the price of Terex stock fell $9.30 per share, or 20%, to close at $38.02 per share.